As the excitement capital of the world, Las Vegas has an unrivaled reputation and a culture that can't be found anywhere else on the planet. But even though the city might seem to have it all, there is one thing definitely missing -- a sense of nostalgia. Sitting on some of the priciest real estate to be found anywhere, Las Vegas simply has no room to allow outdated properties to linger as they fade into obsolescence. Whether you call it callous or practical, old favorites like the Sands and the Dunes now exist only in pictures. Out of their rubble, two classier -- but less historic -- megaresorts have emerged: Las Vegas Sands (NYSE:LVS) Venetian and MGM Mirage's (NYSE:MGM) Bellagio.

For years, rumors have swirled about a similar fate for the Tropicana, a storied property that wowed visitors when it first opened in 1957. Located just south of the MGM Grand at the southern end of the Strip, the Tropicana was among the city's first true luxury resorts. Sammy Davis, Jr. once called it home. Today, though, the property -- which is perhaps best known for its long-running Folies Bergere show -- is struggling to remain competitive. The famed resort recently announced that it will no longer be accepting reservations after April 14, a move that has some observers questioning whether the 1,900-room resort has a date with the wrecking ball.

The owner of the casino, Aztar (NYSE:AZR), a company established in 1989 to manage the gaming assets of Ramada Hotels, has been slow to decide exactly what it intends to do with the aging property. Investors were frustrated last February, when the Tropicana stopped booking reservations temporarily, only to ultimately postpone any development plans. Since then, management has been tight-lipped, saying only that architectural work was in progress.

On one hand, it's easy to understand the firm's reluctance to make any hasty decisions, given the amount of capital involved. Even the once-extraordinary outlay of $1 billion is now insufficient to develop a top-tier strip property. Local casino operator Station Casinos (NYSE:STN) has committed nearly that much to its Red Rock Station resort, which is expected to open soon in the Summerlin community, northwest of town. But Aztar isn't nearly as deep-pocketed as its larger rivals. Furthermore, with just a single property in the Las Vegas market, it is also less able to absorb any disruptions caused by construction.

Yet it is equally clear that some type of redevelopment needs to be undertaken quickly. Aside from the Las Vegas Tropicana, Aztar also owns a small casino in nearby Laughlin, two riverboat casinos, and the Atlantic City Tropicana. Of these, the Las Vegas Tropicana has the lowest margins (around 21%) for earnings before interest, taxes, depreciation, and amortization (EBITDA). Last quarter, the property reported declines in both revenues and operating cash flows, while each of the others in the Aztar family posted gains.

To see the financial impact a renovation can make, look no further than Aztar's Atlantic City Tropicana. Following a recent $245 million expansion that includes a new 500-room hotel tower and the construction of a 200,000-square-foot promenade bustling with restaurants, retail shops, and entertainment venues, average daily room rates have climbed 17% to $113. Meanwhile, those in the Las Vegas resort remained quite low by Strip standards, rising modestly to just $75. On a year-to-date basis, formerly sluggish revenues in Atlantic City have jumped 26% to $372 million, while those in Las Vegas have edged up only 0.6% to $124 million.

While I don't think the company will attempt a massive project similar in scope to MGM's Project CityCenter or Boyd Gaming's (NYSE:BYD) Echelon, it has filed a request with Clark County planners for 2,750 rooms and has hired Tony Marnell, the same man who built the Rio and the Bellagio, to come up with some ideas. It is possible that the company will develop the northern half of its 34-acre property and then bring in a joint-venture partner for the second phase.

In any case, investors will likely hear the final verdict within the next few months, and my guess is that news of the eagerly awaited redevelopment will send the shares higher.

Fool contributor Nathan Slaughter owns shares of none of the companies mentioned.